As student loan debts continue to rise and default rates remain steady, yet high, cash-strapped states — 19 in fact — have authorized government agencies to seize state-issued professional licenses from residents that have defaulted on their student loans. These policies are extremely punitive and shortsighted.

Professional licensing exists to demonstrate to the public that a practitioner has proven at least some level of basic competency in their chosen field of practice. To revoke one’s license, which is nearly always a requirement for working in one’s chosen profession, prevents a person from utilizing skills that they incurred debt in order to obtain.

Undoubtedly, some folks might default on their loans due to negligence or financial mismanagement. Still, others default due to extenuating circumstances that are truly beyond their own control. A myriad of ways already exists for creditors to collect on these debts — from property liens to wage garnishments to withholding tax refunds.

Due to licensing revocation, not only are these people not working in their desired field (further constraining the supply of much-needed services like Registered Nurses), but they are also not paying income taxes or paying into government assistance programs. Furthermore, they are not able to save for retirement, nor contribute revenue to the states via sales tax.

It is true, there exists a chance the person may find employment at a comparable salary level, but the most likely scenario is that they are now either jobless or underemployed, subsequently paying less into the local economy and state coffers than before.

Once someone has had their license revoked and is forced from their profession, they will likely find themselves unduly pushed onto welfare programs — a double negative for state and national fiscal health. States should be thoroughly evaluating the net benefit or liability of these types of policies.

One of the greatest errors of policymakers at the local, state, and federal levels is to analyze policy in isolation, especially when it comes to those dealing with the intricacy and complexity of the modern economy.

According to economist Henry Hazlitt, “The bad economist sees only what immediately strikes the eye.” The very same can be said for state and federal policymakers. We must consider the outcome of these punitive policies.

When there already exists more than sufficient means of recourse for lenders, the revocation of professional licenses is an unnecessarily castigatory measure that needs to find its way to the annals of well-intentioned, but maligned policies that have been repealed, not to be replaced.

Author’s note: For the sake of disclosure, I hold four Financial Industry Regulatory Authority (FINRA) securities licenses, a Kentucky Real Estate license, and one professional designation in the Mergers and Acquisitions field.

Michael Keck is the vice president of Five Talents Financial Group, a mid-market investment banking firm that advises clients on the acquisition or sale of privately held companies. He is a gubernatorial appointee to the Board of Directors of the Kentucky Higher Education Assistance Authority and The Kentucky Higher Education Student Loan Corporation and currently serves as the treasurer-secretary of the board. He is a Young Americans for Liberty Media Ambassador.